Will the next Contestant please Stand Up

Spain can’t really be the next-but-one euro-zone sovereign financial disaster.
Can it?
After all, its public finances are much healthier than Ireland’s, or Greece’s, or Portugal’s. And its banking sector has been a rare beacon of probity in amongst a global financial mess.
Right?
I think not. Get ready to rumble!

The End of the Euro?

Portugal became the latest European nation to suggest it was on the brink of seeking help from Brussels after Ireland confirmed it had begun preliminary talks over its debt problems.
Greece recently disclosed that its economic problems are even worse than previously thought.
Monday, the German Chancellor Angela Merkel raised the spectre of the euro collapsing as she warned: “If the euro fails, then Europe fails.”

Truth and Greek facts?

I have previously posted about the PIIGS in Europe and their possible effects on the Euro. Greece has been under constant observation by Eurocrats.
It has now come about that Greece's 2009 budget deficit was worse than previously calculated (by the Greeks), making it the largest in the eurozone.
The country's deficit last year stood at 15.4% of its annual economic output, said Eurocrats. This is higher than the 13.6% figure that was reported, by the Greeks, in April 2010.
Due to the revision, Greece said its 2010 deficit would only be cut to 9.4%, not its earlier target of 7.8%.
If you can believe their figures.

The Euro? A good idea?

It seemed strange to me when I first heard the idea that there would be a universal currency in Europe. I knew that there were weak currencies (the Lira) and strong currencies in Europe (the Deutschmark), and that the weaker ones, were having a difficult time in competing in the global marketplace.

In that sense, the Euro would give those countries a more viable currency with which to do business. That said, I was always suspicious that in times of trouble, like right now, for example, that those weaker economies would drag on the common currency and that the cracks in Europe's economic unity would begin to show.


In my opinion, the Euro was always intended to boost the weaker economies in Europe by giving them the same currency as the stronger ones. However, I see the opposite as happening right now, that the weak European economies are sending ripples through the stronger EU members and that both are now hamstrung by the currency that they share.
It worked out well enough when times are good. It allowed a much easier sale of goods across borders and probably helped smooth some inflation for weaker countries. However, now the economies of Europe are slow each country has its own separate needs, the Euro is an anchor around all their necks.
The individual nations are now unable to fix their own problems with currency manipulations to ease interest rates and adjust deflation/inflation. Maybe that is why the UK decided to keep the pound.


I believe the Euro can't last. There are too many interests to maintain a uniform currency.

Double-Dip Recession

I hear and read the phrase Double Dip recession, yet no one has ever explained what it it means. So I looked it up. Its simple.
When gross domestic product (GDP) growth slides back to negative after a quarter or two of positive growth. A double-dip recession refers to a recession followed by a short-lived recovery, followed by another recession.
The causes for a double-dip recession vary but often include a slowdown in the demand for goods and services because of layoffs and spending cutbacks from the previous downturn.

Irish Banking Crisis

The one thing to be said for the Irish Banking crisis is that it puts our troubles into perspective. The Irish taxpayer support for the banks in Ireland amounts to a staggering 30 per cent of GDP; The UK’s is 6 per cent of GDP. (Can’t find out what Spain’s is : which is a bit worrying!)

The low interest rates, set by the European central bank and designed for the needs of the big European economies (i.e Germany), provided the funds for the Irish property market, which has since collapsed.

Granted, Britain is outside the euro, and we can set interest rates for the needs of our own economy. It will be some time before we join the Euro, providing the Euro survives.

Spanish Banks Hooked on ECB Cash for Years

Spanish banks have become reliant on the ECB, the European Central Bank, (the lender of last resort to EU countries) as investors sidestep their bonds. This will make Spain subservient to the stronger EU countries that loan their money to the ECB

The borrowing from the ECB by the Spanish Banks since the inception of the euro, based on Bank of Spain figures indicate that they asked for a record 130 billion euros ($166 billion) in July, accounting for 29 percent of total borrowing from the ECB, almost four times their average 8 percent share since 1999.

Spanish banks have been all but shunned by international investors since the collapse of a housing boom in 2007 triggered the worst recession in 60 years, with the unemployment rate surging above 20 percent. Bad loans reached 5.5 percent in May from 4.7 percent a year earlier.

183 day rule

If you spend more than 183 days in Spain during one calendar year, you become liable for Spanish taxes whether or not you take out a formal residence permit (Residencia).
These days do not have to be consecutive. You do not become resident for tax purposes until the morning of the 184th day. Temporary absences from Spain are ignored for the purpose of the 183-day rule unless it can be proved that the individual is habitually resident in another country for more than 183 days in a calendar year.
This is not negotiable.
If you still pay taxes, think you live in the UK, have all your family there, etc. It does not matter. You still have to pay Spanish taxes and are considered a resident in Spain.
The good news is that you don’t have to pay UK taxes, if you do, then that is your fault. Paying taxes in the UK or any other country does not exclude you from paying Spanish taxes if you are resident for 183 days in a year.
Not a Spanish Tax year is the same as a calendar year. 1st January to the 31 December.

PIGS Austerity Drive

PIGS austerity drive country-by-country

For EU leaders the short-term goal is to restore confidence in the euro. A new austerity drive is sweeping across Europe, as governments struggle to trim huge budget deficits and the 16-nation eurozone races to reassure sceptical markets.
What belt-tightening measures are the PIGS EU member states taking?

PORTUGAL

The Socialist government of Jose Socrates has announced a range of austerity measures aimed at cutting the deficit to 7.3% this year and 4.6% in 2011.
Top earners in the public sector, including politicians, will see a 5% pay cut.
VAT will rise by 1% and there will be income tax hikes for those earning more than 150,000 euros. By 2013 they will face a 45% tax rate.
By 2013 military spending will have been cut by 40% and the government is delaying the launch of two high-speed rail links - the Lisbon-Porto and Porto-Vigo routes.

ITALY

The Italian government has approved austerity measures worth 24bn euros for the years 2011-2012. The cuts amount to about 1.6% of Italian GDP, and are aimed at bringing the deficit below the EU's 3% ceiling.
Italy aims to cut public sector pay and freeze new recruitment. Public sector pensions and local government spending are also being targeted, and there are plans to crack down on tax evasion.
Funding to city and regional authorities is expected to be cut by more than 13bn euros.
For the next three years there will be a freeze on public sector pay rises and cuts in public sector hiring, replacing only one employee for every five who leave.
Progressive pay cuts of up to 10% are planned for high earners in the public sector, including ministers and parliamentarians.
Retirement will be delayed by up to six months for those who reach retirement age in 2011.
Provincial governments serving fewer than 220,000 inhabitants will be scrapped, as will several publicly funded think-tanks.

IRELAND

The Irish government has presented three austerity packages in just over a year.
In December the budget for 2010 slashed government spending by 4bn euros, cut all public servants' pay by at least 5% and reduced social welfare.
The measures include cuts of 760m euros in social welfare and 960m euros in investment projects.
Child benefit is being cut by 16 euros per month, bringing the lower rate to 150 euros per month and the higher rate to 187 euros per month.
A carbon tax has been brought in, set at 15 euros per tonne of CO2.
The Irish deficit currently stands at 12% of GDP. The government aims to cut it in stages, to reach 2.9% in 2014.

GREECE

The Greek government has pledged to make drastic spending cuts and boost tax revenue in return for a 110bn-euro (£95bn) bail-out from the EU and International Monetary Fund.
Greece has started drawing on the bail-out money because a sharp downgrade of its sovereign debt rating made its borrowing costs soar.
The aim is to slash the budget deficit from 13.6% of gross domestic product (GDP) to below 3% by 2014. The EU's stability pact sets 3% as an EU-wide maximum for deficits.
Greece has started cracking down on tax evasion, and on corruption within the tax and customs service. It will also curb its widespread early retirement schemes. The average retirement age is set to rise from 61.4 to 63.5.
Under the plan to slash the budget by 30bn euros (£26bn; $37bn) over three years Greece aims to: scrap bonus payments for public sector workers; freeze public sector salaries and pensions for at least three years; increase sales tax (VAT) from 19% to 23%; raise taxes on fuel, alcohol and tobacco by 10%.
The harsh measures have already triggered a wave of public sector strikes and violence on the streets of Athens.

SPAIN

Spain's austerity drive includes a 5% cut in public sector pay, starting in June. Salaries will then be frozen for 2011.
More than 6bn euros will be cut from public investment and some pensions will be frozen. In all, the spending cuts will total 15bn euros in 2010-2011.
Smaller savings include an end to the 2,500-euro cash payout for new mothers, known as "baby cheques".
The long recession left Spain with a swollen budget deficit - more than 11% of GDP, way above the EU's 3% target.
Spain's public finances have come under intense scrutiny since the Greek bail-out deal, amid fears that Spain could be the next "weak link" in the eurozone.

Tour de France

This years Tour ends today as it has done since 1975 in Paris.The Tour de France is an annual bicycle race that covers approximately 3,600 kilometres (2,200 mi) throughout France and sometimes bordering countries. The race lasts three weeks and attracts cyclists from around the world. The race is broken into day-long segments, called stages. Individual times to finish each stage are totalled to determine the overall winner at the end of the race. The rider with the lowest aggregate time at the end of each day wears a yellow jersey.
It has in recent years been subject to many stories of doping, always denied, but more and more riders have been tested and found guilty, in the winner in recent years. It is not hard to understand why doping is used. The Tour must be the ultimate test of a bicycle riders endurance and the temptation to use performance enhancing substances or methods to ensure a ‘finish’ never mind a win must be strong.
I get to watch the race live on Eurosport when I am at the gym in the afternoon, my pain is absolutely nothing compared to the pain those riders must be in. I at least can finish when I have done my hour!
I take my hat off to those guys on the Tour. Fit they are.

Greece first then Spain

Spain’s Caja’s  are still trying to merge in the hope of beating the June 30 deadline to tap a €99 billion (£84 billion) government bank rescue fund. The Spanish government wants the 45 regional caja banks to shrink to 15. It is part of a desperate government effort to restore confidence in the faltering economy, which threatens to drag down the rest of the eurozone.
The currency faces further pressure from Greece, which is studying plans to restructure its debt despite a multi-billion-euro bailout from Germany, France and the IMF.  The Centre for Economics and Business Research (CEBR), a London economics consultancy that is advising the Athens government, said Greece would be unable to escape its debt trap unless it devalued its currency to boost exports.
The only way for this to happen is for Greece to leave the euro. Until now, this has been played down as it would set in motion the break-up of the single currency.
Spain has the highest unemployment in Europe at 20% and a budget deficit that is 9.3% of GDP, and similar to Greece the unions are fighting anything that increases unemployment, by striking. The Spanish government has recently passed by just one vote 15 billion euros of cuts, including a 5% across-the-board pay reduction for civil servants.
All this is pain, just like Greece, is causing disruption to the economy. If Greece leaves the euro and devalues giving it breathing space, Spain will follow quickly. It is the easy way out. Back to the peseta.

Austerity Plan for Spain

Spanish government has recently approved an austerity plan aimed at reducing the country's large fiscal deficit and easing concerns that Spain could follow Greece into a debt crisis. The tough cost cutting measures are expected to save the Spanish government 15 billion euros in 2010 and 2011.

The plan is expected to reduce Spain's deficit from its current level of more than 11 percent of gross domestic product to 6% of GDP by 2011 and to 3% by 2013. The plan calls for

• slashing salaries of Cabinet ministers and other senior officials by 15 percent.
• an average five-percent pay cut for public sector workers from June,
• and a pay freeze from 2011.

Unions in Spain have reacted to the austerity plan and have called a public sector strike today the 8th June to protest against government's tough cost cutting measures.
The latest austerity plan is over and above a 50-billion-euro austerity package announced in January to reduce Spain's budget deficit from the 11.2% of GDP posted last year to the eurozone limit of 3% by 2013.
The approval of the latest set of austerity measures by the Spanish government comes after official data indicated that the country has managed to move out of recession in the first quarter of this year. Data released revealed that the country had posted a growth rate of 0.1% in the first quarter, mainly due to a rise in exports and household spending.
Though Spain managed to move out of recession in the first quarter, the country's unemployment rate remains at 20%, which is almost twice the eurozone average.
Could recession get worse in Spain? I think so. For an economy that depends so much on the tourist trade, which in turn depends on three factors:

• people having disposable income
• flights being available
• the weather

The first two are under the hammer as most of Europe is in recession and the Icelandic Volcano is causing massive disruption when it hiccups. The third is probably the only certainty along with the situation getting worse in Spain.

Germany and the PIGS

Watching the economic drama of the PIGS — Portugal, Italy, Greece and Spain — keep telling us, reasonably, that you cannot have a Southern European economy and a German exchange rate. They mean that the euro, dominated by mighty and disciplined Germany, has become a straitjacket for deficit-ridden, debt-laden, unproductive economies that cannot devalue their way out of the crisis because they have ceded control over monetary policy to the European Central Bank.
As a resident in Spain it has been painful to watch the Spanish economy collapse with one out of every five adults and four out of 10 young people out of work, millions of mortgaged properties underwater, half of the savings & loan banks in a state of insolvency and a private debt almost twice as large as the size of the total economy, Spain is going through a “Thatcher Crisis” or a “Brown Period”
Spain's shock after realizing that being a member of the European Union entailed worldly costs and sacrifices and a refusal to even consider the possibility of giving up the euro. In a situation in which its domestic currency was free to reflect its deficits, high labour costs and low productivity, Spain's currency would have been naturally devalued by now.
The common currency contributed greatly to Spain's delusional economy by giving it an unrealistic purchasing power and is making tough to overcome the recession by not allowing it to devalue the exchange rate. But the real cause of what is happening is that the nation mistook easy credit, subsidies and social protection for real wealth. If they don't relearn the basics of what it takes to be rich in a competitive world, Germany and a few others will eventually say goodbye to them.

Death by Chocolate

The Lady of the Villa loves her Chocolate and has any excuse, usually people coming over, for her to request her favourite sweet. Here is the recipe.

Yield: 12 servings.

Ingredients

8 oz (225 g) dark semisweet chocolate (40-50% cocoa)
2/3 cup (140 g) butter
1 cup (210 g) sugar
4 eggs
4 heaped tablespoons (1 dl) all-purpose flour
4 tablespoons unsweetened cocoa powder
1½ teaspoon baking powder or 1 teaspoon baking soda
1 teaspoon vanilla extract
4 tablespoons sour cream

Ingredients for frosting

2/3 cup (1.6 dl) heavy cream or whipping cream
9 oz (260 g) semisweet chocolate (40-50% cocoa)

Method                                      

Preheat oven to 350 deg F (Gas mark 4 or 180 deg C).

Line a circular 10 inch (25 cm) cake tin (3 inches tall) with grease proof or other non-stick paper and grease the tin. (Please note that the cake will rise to 3 inches and collapse somewhat when cooled. If your cake tin is less than 10 inches wide and 3 inches tall I recommend that you use two cake tins.)

Break the chocolate into small pieces and melt it with butter over hot water.

Beat the eggs with sugar, mix with flour, cocoa powder, baking powder and vanilla extract.

Slowly fold in the melted butter and chocolate and the sour cream.

Bake at 350 degrees until a wooden pick inserted in centre comes out clean, approximately 40 to 50 minutes (if using 2 cake tins 20-30 minutes may be sufficient).

Cool the cake completely. When it has obtained room temperature place it in the refrigerator for at least 30 minutes before removing the cake from the tin (the cake is sticky and difficult to cut when it is warm!) Remove the crusted surface on the top of the cake, and cut in half, horizontally.

If you think the frosting etc is too much (I do personally, you can stop here and enjoy the cake). If you want to go on here it is:

Frosting

Heat 2/3 cup (1.6 dl) of heavy cream or whipping cream in a sauce pan.

Remove from heat, add 9 oz (260 g) of finely chopped dark semisweet chocolate, stir until smooth, and let it cool until in thickens.

Use one 1/3 of the frosting between the two layers, 1/3 on top, and the rest around the cake. Put the cake into the fridge for one hour or more to harden the frosting.

This cake should have room temperature when served. 

Burqas simply not EEC

There has been a lot in the press (UK and EEC) rgarding the Burqa; I thought I would put my cents worth in. The burqa is a symbol of Islam, which, in its worldwide quest to replace our Judaeo-Christian culture, is the source of nearly all modern terrorism. Islam has no separation of powers, being a political, legal and religious system rolled into one; the penalty for leaving it, or for insulting it, is death. All of it is based on the Koran, and is encapsulated in sharia, a medieval legal system of flagrant gender apartheid.

Men are superior to women because “Allah has chosen them one above the other”, so a woman’s testimony in court is worth half a man’s (Sura: 2:282). Only men can give evidence in rape and adultery cases, which also carry the death penalty.

Sura 4.34 says that if a man fears his wife is being disloyal, he should beat her, and Suras 2:229 and 230 allow men to divorce their wives without reason. Hardly very British.

All this is happening in a town near you, and it won’t be long before it invades the appeasing comfort in which our political class lives. For years it castigated as racist anyone who dared to warn about uncontrolled immigration. Now it is sowing another wind by refusing to face up to the reality of Islam.

Burqa? No Thanks. 

EEC Countries

Austria 1 January 1995

Belgium 25 March 1957
Bulgaria 1 January 2007
Cyprus 1 May 2004
Czech 1 May 2004
Denmark 1 January 1973
Estonia 1 May 2004
Finland 1 January 1995
France 25 March 1957
Germany 25 March 1957
Greece 1 January 1981
Hungary 1 May 2004
Ireland 1 January 1973
Italy 25 March 1957
Latvia 1 May 2004
Lithuania 1 May 2004
Luxembourg 25 March 1957
Malta 1 May 2004
Netherlands 25 March 1957
Poland 1 May 2004
Portugal 1 January 1986
Romania 1 January 2007
Slovakia 1 May 2004
Slovenia 1 May 2004
Spain 1 January 1986
Sweden 1 January 1995
UK 1 January 1973
This is a complete list of countries in the EEC. I found it while looking for something else. What I had not realized is how much it, the EEC had grown over the years. These countries are known as the eurozone (as most of them use the euro).